Tan Chong’s FY18 results exceed expectations, FY19 forecasts revised higher

KUALA LUMPUR: Tan Chong Motor Holdings Bhd’s (Tan Chong) financial year 2018 (FY18) results have exceeded analysts’ expectations, resulting in the upward revision of FY19 forecasts.

According to the research arm of Kenanga Investment Bank Bhd (Kenanga Research), Tan Chong’s FY18 core profit after tax and minority interest (PATAMI) of RM103.4 million came in above its and consensus expectations at 119 per cent and 128 per cent of full-year estimates, respectively.

Kenanga Research noted that this was due to higher-thanexpected automotive margin.

“Interim dividend per share (DPS) of two sen was declared for the quarter bringing FY18 DPS to four sen, as expected,” the research arm said.

“The group typically paid its dividends in the second quarter (2Q) and 4Q.”

Similarly, Tan Chong’s FY18F core net profit of RM125 million was well ahead of both the research arm of MIDF Amanah Investment Bank Bhd’s (MIDF Research) and consensus expectations.

On FY18 dividends at four sen per share, it was higher than MIDF Research’s earlier estimate of three sen per share.

Looking ahead, MIDF Research’s FY19F was raised 43 per cent to reflect better than expected margins from the new launches. Additionally, the research arm introduced its FY20F.

As such, the research arm’s FY19F and FY20F was at RM102.3 million and RM116.3 million, respectively.

“We expect FY19F to contract given our US$:RM assumption at RM4.05, versus RM3.90 in FY18.”